Divorce can cause your life to change in significant ways, including major changes in your financial situation.
Therefore, you should take proactive steps to restore your financial security during this transition.
Assess your financial situation
A couple’s financial situation was one of the most common reasons for divorce for the 989,518 divorces that happened in 2022. Unfortunately, after your divorce, you also need to be mindful of your finances. Begin by assessing your current financial situation. Review your assets, debts, income and expenses. Use this information to make informed decisions.
Create a budget
Develop a budget to help you manage your finances post-divorce. Calculate important expenses, such as housing, utilities, food and transportation, and allocate your income accordingly. Cut non-essential spending and focus on saving and debt repayment.
Establish financial goals
Set realistic financial goals for yourself. Whether you need to build an emergency fund, pay off debt or save for retirement, create clear objectives that will help you stay focused and motivated.
Explore income opportunities
Consider ways to increase your income. You may pursue additional education or training to advance your career. You could also seek higher-paying job opportunities or explore freelance or part-time work.
Protect your credit
Close joint accounts if possible after a fair division of these assets. Make timely payments on any remaining debts to avoid damaging your credit further.
Update your estate plan
Review and update your estate plan to reflect your new circumstances. Review your beneficiary designations on insurance policies and retirement accounts and create or revise your will and powers of attorney.
Do not hesitate to seek professional financial guidance if you are unsure how to proceed. A financial advisor can provide personalized advice based on your unique circumstances and help you develop a plan to achieve your financial goals.
